Register
Eric & Stephanie have $14,500 saved for a down payment on a home. What is the future value of their savings in five years if it is invested at 12% return?
390,743 views
16 votes
16 votes
Eric & Stephanie have $14,500 saved for a down payment on a home. What is the future value of their savings in five years if it is invested

at 12% return?

User Matt Miller
by
2.8k points

1 Answer

13 votes
13 votes

Answer:

FV = $25553.9544064 rounded off to $25553.95

Step-by-step explanation:

The future value of a cashflow or amount can be calculated using the following formula,

FV = PV * (1+r)^t

Where,

  • FV represents future value
  • PV represents Present value
  • r is the rate of return or interest
  • t is the time period

We know the values for PV, r and t. Plugging in these values in the formula above, we can calculate the future value to be,

FV = 14500 * (1+0.12)^5

FV = $25553.9544064 rounded off to $25553.95

User Jnj
by
3.0k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
If you buy a one-year bond for $4,000 and the issuer pays you back $5,000 at the end of one year, the interest rate on the bond is
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that Group of answer choices bond interest is deductible for tax purposes. interest must be
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm
Link Copied!